Job Openings Trend Down, Still Outnumber Jobless By Far

The number of job openings in the United States continued its downward trend in June 2023, as the labor market appears to be coming off the boil. According to the latest Job Openings and Labor Turnover Survey (JOLTS), 9.58 million positions remained unfilled on the last business day of June, the lowest reading since April 2021 and only the fourth time in the past two years that job openings dropped below the 10-million mark.

With 9.58 million job openings and just 5.96 million people officially unemployed, there's still more than 1.6 unfilled positions for every job seeker, indicating that the imbalance between labor demand and supply, identified by the Fed as one of the factors driving inflation, persists, although it is no longer as extreme as it was throughout 2022. Before the pandemic hit in March 2020, there had been 1.2 job openings per unemployed person in an already tight labor market. That indicator then crashed to 0.2 by April 2020 amid mass layoffs in sectors affected by Covid restrictions before climbing as high as 2.0 job openings per unemployed person by March 2022, at the height of the "Great Resignation".

Fed Chair Jerome Powell has repeatedly stressed that the labor market needs to balance out to relieve upward pressure on wages and thus cool inflation. The fact that inflation has come down notably despite the labor market remaining strong has fueled hopes of a soft landing, although the FOMC meeting minutes released on Wednesday revealed that Fed officials still see significant upside risk to inflation.